Places To Open A Foreign Bank Account To Store Gold

After my post about the Permanent Portfolio which included physical gold, a reader asked me where he could open up a foreign bank account to store gold. Well, in the Appendix of the book Fail-Safe Investing, the author did list specific banks that allow U.S. investors to open account and buy gold within them. Here they are:

Browne makes it sound that opening an account at one of these places is as simple as opening an online account with no physical branch near you. He also states that these are either Swiss or Austrian banks, which are bound by the laws of those countries, not the countries of their parent companies. Now, I can’t attest to the accuracy of this list, as the book was last updated around 2001 and I have no personal experience with any of them. Please perform your own due diligence.

The reasons for buying gold in a foreign bank account are primarily to provide a safe store of assets in case of very unlikely (but still possible) situations like war, government collapse/confiscating of assets, or other crisis. I’m not going to participate myself as I see the risks outweigh the benefits – cost, complexity, chance of fraud or loss, etc. – but if you read some of the stories from Argentina’s economic collapse it can get scary.

As for legality, it would seem to be perfect legit. You are simply storing physical gold there. Gold does not produce dividends or interest, so you’d only be liable for taxes if you sold them at a profit.

Comments

My question is where can I actually buy gold coins from a US Bank? I have searched through my local bank branches and they don’t seem to sell any. I would like to hold physical gold coins, not buy a gold ETF.

GoldMoney and BullionVault sell gold accounts that are redeemable in gold if you have more than a kilo, otherwise cash. Both are foreign companies. Bullion Direct and APMEX sell physical gold bullion. Both are domestic companies.

Anglo Irish bank was recently nationalised by the Irish Government when it collapsed as a result of their risky lending to property developers and some very questionable corporate governance practices (directors loans hidden off books, alleged share price support scheme).

You are a great saver don’t get me wrong but you really chase the fads. Let me guess you jumped into tech stocks in the 90s, then you loved emerging markets, and reits, and then you bought a house at almost the peak price in California, and now you are talking gold. It is time to sell gold folks. Gold has too much of a salesperson pitch to it right now, just like tech, emerging markets, reits, and real estate had before they collapsed.

You can also buy gold directly via Monex and Kitco. Kitco also allows you to purchase unallocated storage (I think via the Perth Mint). As well, you can buy storage (allocated or unallocated) at the Perth Mint via EuroPacific Capital (Peter Schiff’s firm). Canadian residents should check out the new Sprott Gold fund, a mutual fund with a small 0.8% fee, which my research leads me to believe is one of the cheapest ways to gain access to physical gold.

@Hogan: If that’s directed at Jonathan, you are making a completely baseless claim. I take it that you don’t really follow this blog, but did you even read the whole blog entry? Did you see this sentence?

“I’m not going to participate myself as I see the risks outweigh the benefits – cost, complexity, chance of fraud or loss, etc.”

It’s very easy to crap on gold, but there is a lot to the thesis at present. Gold is NOT high on an inflation-adjusted basis, in terms of its ratio to the DJIA, or in terms of its ratio to the amount of fiat currency in circulation. Gold is different from other commodities because of its special status, which might well be a psychological relic, however all hard assets will appreciate relative to an increasing supply of paper money…that’s just common sense: the amount of gold in the world is not increasing nearly as fast as the amount of money.

@Jim
I interpreted his article to mean that he did not have plans to open a foreign bank account to store gold. All I am really saying is that gold is over hyped just like all the other bubbles were in the past ten years, and the article about opening a foreign bank account to store gold contributes to the hype. I just hate to see a great saver lose money.

I’m really surprised by the negativity. Saving money is meaningless if the value of that money is destroyed by inflation. What do you think is going to happen when the government infuses the economy with a couple trillion dollars that they PRINT? Gold is gold. Oil is oil. Copper is copper. There are supply and demand issues. US consumer demand will drop. The number of dollars in the system relative to any hard asset will be a bigger ratio than it is now. Current dollar strength against the Euro is not fundamental, but a function of the EU protecting its exports and of the need for foreigners to buy dollars to pay back US dollar-denominated debts. It doesn’t have to be gold, but it makes a lot more sense to hold real assets than to hold rapidly inflating fiat currency.

@Josh
Josh you sound just like the flippers who lived in California but were buying Arizona real estate in 2005. Gold is a bubble, pure and simple. It is going down. You think all that printed money is going to rocket us out of the recisson were in, no it is going to keep us from having 25% unemployment. All the lemming bankers chasing the hottest investment are scared, broke, or both. Do you really then there is gong to be an alvalanche into gold and oil when we just had historic runs and all the bankers are gone or under the thumb of the government.

@Hogan It doesn’t matter whether the printed money helps or not (it may soften the depression, it may not), but commodity prices are a function of supply and demand. The supply of dollars chasing commodities is increasing, so each dollar will be worth less relative to those commodities. Demand for commodities may stay low, but not enough to meaningfully affect our decreasing ability to pay for them with the same number of cotton bank notes.

Gold doesn’t go up or down. Gold is gold. The value of the dollar goes up and down in relation. Home prices were vastly out of whack and that could be expressed quite simply by the ratio of rents to sale prices or local median income to sale prices. If there’s a comparable ratio that shows gold to be expensive, I would like to see it. The dollar’s decline in purchasing power against many currencies and commodities, and gold, has been in motion many years. This is not to say that we won’t see short and mid-term dollar strength, but this is more technical than fundamental. We ARE printing more dollars, like it or not. As for gold, there’s not much of it out there.

@Josh
You make some good points. I just think people are so scared they aren’t going to invest in anything, and many of the people who help funnel money to investments such as gold are out of business or under the thumb of the government.

Government definitely benefits little from a flight to gold, so they will try to knock it down. I’ll wait to see whether the planned IMF gold sales actually drive down the market (fear of the sales combined with G20 feel good rhetoric did affect prices last week). If the world doesn’t re-approve the 500 ton CBGA limit on IMF sales, we might see some downward pressure, but the fundamentals for currency remain poor.

I’m also in favor of real estate if it can be bought for a good monthly payment. Low interest rates, lower prices and future inflation make real estate a good idea in some markets. I’m still waiting for the second bad bonus cycle in Manhattan and the exodus of unemployable “masters of the universe” before calling a low. We’re still vastly overpriced here relative to median incomes. I love how the standard rejoinder is that NYC has “so many rich people” as if those people tend to own 20 houses a piece. They own 2-3 apts in the city, tops, and usually just because they’re living in one while redecorating another one. They aren’t going to step in and save the market by purchasing $500,000 200sf studios. If real estate is cheap in your area (low median/sale ratios and a monthly payment around the price of renting something comparable) inflation will kill a lot of the cost of the mortgage, so it’s a good deal.

“I’m really surprised by the negativity. Saving money is meaningless if the value of that money is destroyed by inflation. What do you think is going to happen when the government infuses the economy with a couple trillion dollars that they PRINT? Gold is gold. Oil is oil. Copper is copper. There are supply and demand issues. US consumer demand will drop. The number of dollars in the system relative to any hard asset will be a bigger ratio than it is now. Current dollar strength against the Euro is not fundamental, but a function of the EU protecting its exports and of the need for foreigners to buy dollars to pay back US dollar-denominated debts. It doesn’t have to be gold, but it makes a lot more sense to hold real assets than to hold rapidly inflating fiat currency.”

Well, the negativity comes with experience.
Everyone here based their treasured minds on the legend of a “free market”. Which is far from freedom. Which is under total control by a group of “creators” of “free market”. Yes, I am already hear your pathetic ramble about “conspiracy shit” and so… Sure, continue to ramble about greatness of “real assets”. Where did you’ll find one? And when?
Real estates? Gim’me a frumking break, ok? Prices of houses in certain states collapsed as much as 45% but Toyota Camry still $18G’s and milk $3/gl. So where is the frumking “intrinsic” value of American RE’s? In Chinese chipo-nail shops?
Gold? Platina? Palladiy for freaking “pink gold” (another American nonsense)??? Who’s MAKING these prices? Me at the gas station? Joe Shmoe by daily nailing asphalt roof? South Africa is in deep shit now. Russian gold production is stalled YEARS AGO. Because of WHAT and WHY?????????????????????
So, no one needs as much gold anymore?
Someone “cleverly stated” about “world demand”.
WHO’s demand IS IT?
Did you see boost of jewelry sales lately in ANY local shop in USA?????? Electronics with gold-plated circuit boards, wire contacts, gold-plated pens? Or maybe license plates in 24K-gold frames on sale at significant discounts and public breaking doors of these shops?
What’ta’hell are you saying?

The greenback shit has being printed with one purpose only – to create an illusion of movement. People put up with their precious lives just to save and buy a pound of Gold and scraping whatever it takes, sacrifice about every day of their relatives lives TODAY to create an illusion of tomorrow’s prosper retire for themselves. Whith another “balooned” invaluable.

Once the gold will drops down 40% what will happened to all your “wisdom keepers”?
After all, when gold drops – oil ups, isn’t it? So when oil ups, what happening to Joe Shmoe and you?
Yes, my dear professionals, Joe and we WILL NEED MORE CASH, so we’ll go and dump these bullions to make ends meet.

Band of rich sons of a bitches boiling this crap and several “Shnobel Price Winners” in “economics” breaking their fingers off by typing newer and newer legends about “free markets supplies and demand”.

“Gold doesn’t go up or down. Gold is gold. ”
Yes, so the oil is oil, and shit is shit as well, but FYI only: “Light Brent Crude” was above 100 of US paperback a year ago or so and now below 70 of the same US paperbacks.
Does it ring the bell of “intrinsication”????

“the planned IMF gold sales actually drive down the market (fear of the sales combined with G20 feel good rhetoric did affect prices last week).”
F…rumking IMF are the major scambags in this rulette, and yes, please keep looking close and follow the major gold suppliers. Who OWNs them??????
G20 rethoric “feels good” about WHAT improvement? Improvement of repeating the Feds supplied mantra “… it seems to be’re all very close to pass the point of what seemingly appears to be recession’s bottom” and “weallknowwhoomowned” mass media rambled in tact “we are coming back…” Gim’me another frumking break!!!!
As a matter of fact if by any magic reason US will stop their occupation in Iraq and Afgan the domestic economy will collapse.

Right, when former USSR and former South African Republic were in power the gold may be was in good chance to remain as an international trade currency. But since then both of these largest gold suppliers were screwed and rottened by the same gang that ruling US now – they control EVERYTHING and EVERYWHERE.

Please stop these stupid “supply and demand” rumors. Everything in the world already cashed out by we know whom.

“He has to pay for these trillion dollar bailouts somehow.”
Well, its actually had started already. I’ve my car tax 25% increase this year.

@Kolyan Those IMF gold sales to India really drove down prices, eh? Interestingly, we’re still deflationary in the U.S., but distrust of fiat currency is resulting in a gold bubble (mid stages). Lower demand for goods will probably hurt oil and copper (at least in Euro terms) and they will certainly suffer relative to gold. ~$4 trillion in gold. ~$60+ trillion in currency and growing. I stand by my April comments.

The place to be currently is in commodities. Although I wouldn’t invest that much in gold (because it isn’t as depressed as others), it would still go up in the following years. It is all about timing and reading the moves. Still, if you want real money, commodities are your security. More preferred than the metals unless you can read the moves real well.

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